Spanish Politics Show a Way Forward for Europe

The most interesting election of 2015 may be the one that must take place in Spain before the end of the year.

Although the eurozone crisis seems far from the headlines, tensions in the continent are dormant, not solved. Unemployment remains stubbornly high, and industrial production is far from the pre-crisis peak. In this context it’s unsurprising that populists are riding high across the continent, from Greece – where the extreme left Syriza is now in power – to Paris – where Marine Le Pen’s National Front threatens to be a credible contender for the French presidency in the next elections.

Spain, however, is different. Ever since the democratic transition that put an end to the three-decades long dictatorial rule of Francisco Franco in the 1970s, Spain has had a two-party system akin to the American one, though built for European sensibilities. The Socialists have alternated in power with the Populares for the last three decades, and the two parties have largely agreed on the basics: Since 1975 Spain has developed strong democratic institutions, integrated swiftly into Europe, and modernized its economy (in spite of a gargantuan real-estate boom and bust). This past March the country created more jobs than the United States, and only last week the IMF upgraded Spanish growth yet again. Those people who do not believe that structural reforms yield positive outcomes must, by definition, ignore Spain’s recovery.

Yet, like in Greece and elsewhere, the eurozone crisis challenged the two-party political system. After all, the Socialists had been in office for most of the bubble years and the Populares have seen many a corruption scandal exposed in the headlines while attempting to reform the economy to make it more competitive. These scandals have greatly challenged the credibility of the Spanish elite to implement reforms, depriving them of the legitimacy to ask a long-suffering population to tough difficult choices and often even harder sacrifices. Only last week it was revealed that a former economics minister himself had participated in a fiscal amnesty to bring back undeclared funds to Spain.

Two parties are challenging the system: Podemos and Ciudadanos. The first is a profoundly ideological answer to the crisis; it is a new party that espouses some very old left-wing ideas. Since being catapulted to the international headlines six months ago, Podemos has advocated for universal salaries for every citizen, creating “truth commissions” about foreign debts (and potentially defaulting on them), and rolling back structural reforms to the Spanish labor market. Unbelievably, members of the Podemos elite go as far as to eulogize governments like Venezuela’s, where the political economic model is so exhausted that inflation is rampant, growth is nil, and the opposition is trampled on the streets. At the core, Podemos questions the product of the Spanish political transition, eager for an old left that has proven unsuccessful elsewhere.

Ciudadanos is a different beast, and one that is likely to hold the keys to power in the next government. Its members seek to continue reforms with zero tolerance for corruption. Originated in Catalonia, where the traditional parties have been losing ground to pro-independence movements for years, Ciudadanos is a centrist party that seeks democratic renewal without destroying the successes of the Spanish transition – as well as the more recent but no less fundamental economic reforms enacted since 2010.

In just a few months, Ciudadanos has grown even more quickly than Podemos, leading the latest polls to suggest a four-way tie between the two old parties and the two new ones. But while Podemos is too extreme for any kind of coalition with the established parties, Ciudadanos is not. It can keep reforms alive while bringing youth and renewal to the country’s elites. There is a case to be made for a renewal of the center in the context of crumbling two-party system that does not lead to instability, but rather to the strengthening of the case for reforms and their domestic legitimacy.

Spain has proven it is different in many ways, including a recovery that has led some to call it “a new Germany.” In the political arena, too, it has a chance to prove that European populism is not a permanent consequence of the crisis, but rather an unsurprising byproduct that can be effectively countered. The recent and rapid success of Ciudadanos suggests people want new options, but those options do not need to throw overboard the great conquests of the past 30 years of development and European integration. It is important that Europeans beyond Spain get such options, so that their choice is not just between the past or populism. There is a middle ground of centrist democratic renewal without stale populist ideology.